GLOBAL MARKETS-Shares sag, dollar firm as Fed outlook weighs
* World shares slide China economic plans lacks detail
* Dollar edges toward 100 yen on Fed taper speculation
* U.S. Treasury yields extend gains, Bunds follow
* Firmer dollar keeps commodities under pressure
LONDON, Nov 12 (Reuters) - China's plan to broaden economic reforms failed to give a lift to world shares on Tuesday as higher U.S. government bond yields and growing talk the Federal Reserve will soon scale back its stimulus weighed on sentiment.
China's leaders promised to deepen economic reforms and let markets play a bigger role in resource allocation in a new policy blueprint unveiled at the end of a four-day meeting of key officials from the ruling Communist Party.
"They are looking to break away from government control, allowing the markets to take the lead," said Dong Tao, chief regional economist for Non-Japan Asia at Credit Suisse.
"This is a revolutionary philosophy, by Chinese standards."
However, the government communique contained little to shift the market's attention away from its preoccupation with the timing of the Fed's next policy steps, prompting world shares to edge lower after two days of gains.
The speculation that the Fed could soon begin to taper its $85 billion-a-month in bond buying has grown since last week's surprisingly strong U.S. jobs data, diving the dollar close to 100 yen and lifting it toward a two-month peak against a basket of major currencies.
The prospect of an early policy shift has also caused a sharp rise in U.S Treasury yields as central banks in the euro zone and Japan pursue looser policies to help growth, widening the interest rate differential in favour of the greenback.
U.S. 10-year note yields were up 3.5 basis points at 2.78 percent in European trading, resuming their gains after a Veterans' Day holiday on Monday.
Traders said if the benchmark U.S. yield stayed above 2.75 percent for a sustained period it could herald a move towards 3 percent, last seen in early September, when markets initially anticipated the Fed would begin to reduce its asset purchases.
German 10-year government bonds yields were being dragged higher by the move in Treasuries, rising 3.4 bps to 1.79 percent and above levels seen just before the European Central Bank cut rates on Thursday.
A thin economic data calendar left the debt market awaiting speeches from Fed officials Dennis Lockhart and Narayana Kocherlakota for further hints on when the U.S. central bank might start trimming its $85 billion-a-month of bond-buying.
"It will be interesting to see whether they indicate more of a shift towards QE tapering starting in December or in January," said Mathias van der Jeugt, a strategist at KBC.
SHARE GAIN LOCK-IN
Europe's shares meanwhile were edging down from the five-year highs seen last week as low volumes and a disappointing run of corporate earnings results encouraged many investors to book some of the gains made in this year's strong rally.
In the current earnings season about half of the Stoxx Europe 600 companies that have reported so far have missed profit forecasts, and nearly two-thirds have missed revenue forecasts, according to Thomson Reuters StarMine data.
"Some are getting nervous about the lack of volume so, if you've got any decent performance, you're probably not going to get much more upside from here," said Ioan Smith, managing director of KCG Europe.
Europe's broad FTSEurofirst 300 index has risen nearly 14 percent this year helped by the ECB's easier monetary policy and signs of a recovery across the crisis-hit region.
In commodity markets, China's dominance as a consumer of many raw materials had kept markets in cautious mood ahead of Beijing's announcement though the firmer dollar put prices under pressure.
Three-month copper on the London Metal Exchange slipped 0.5 percent to $7,130 a tonne, while gold dropped 0.6 percent to $1,280 an ounce.
Brent crude oil gained in volatile trade to be above $106 a barrel, adding to its gains in previous two sessions as dealers awaited data on U.S. stock piles due out later.